Indian PM: No reversal of economic reforms to rescue currency

Indian Prime Minister Manmohan Singh Friday said that the falling currency was a "matter of concern", but ruled out reversal of economic reforms or resorting to capital controls in a bid to rescue the rupee. "Forex markets have the notorious history of overshooting... unfortunately this is happening not only to the rupee but other currencies too. Although the rupee is overshooting on foreign exchanges, India is not contemplating any capital controls," the prime minister told the Parliament. "The rupee's tumble is part of a needed adjustment due to the country's large current account deficit and will have a positive impact on export competitiveness in coming months. We need to reduce our appetite for gold, economize use of petroleum products and take steps to increase exports," he added. Singh also blamed "external factors" for the fall in Indian rupee, highlighting the impact of developments in the United States, where the economy is improving and the central bank has been planning to cut back on stimulus measures. "In a more equitable world order, it is only appropriate that the developed countries -- in pursuing their fiscal and monetary policies -- should take into account the repercussions on the economy of emerging countries," he said. "There may be short term shocks to our economy and we need to face them. That is the reality of the globalized economy, whose benefits we have reaped. (But) we must ensure that the fundamentals of our economy remain on track," the prime minister added. The Indian rupee plunged to a record low this week against the U.S. dollar and has fallen more than 20 percent this year.